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Mileage Reimbursement in California

The federal government does not require that employers reimburse for mileage. When employees pay for work related expenses, the employer has no obligation to pay them back. (There are exceptions like when expenses cause employees to fall below minimum wage.)

Except, that is, in California. Mileage reimbursement in California is required.

California law protects employees from bearing the burden of business expenses and so they must reimburse their employees when they drive.

California employers do not have to reimburse the IRS rate. They may instead reimburse actual expenses incurred. If they choose to do it this way, they must keep meticulous records of mileage and receipts. Using the IRS rate is generally easier, however.

From the California Labor Code:

2802. (a) An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.

(b) All awards made by a court or by the Division of Labor
Standards Enforcement for reimbursement of necessary expenditures under this section shall carry interest at the same rate as judgments in civil actions. Interest shall accrue from the date on which the employee incurred the necessary expenditure or loss.

(c) For purposes of this section, the term “necessary expenditures or losses” shall include all reasonable costs, including, but not limited to, attorney’s fees incurred by the employee enforcing the rights granted by this section.

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39 Comments

  1. Sharrah Thompson
    Sharrah Thompson July 15, 2018

    When youre considered as 1099 employee, what is the law for mileage reimbursement, expense reimbursement, traveling reimbursement?

    • Mark D
      Mark D March 6, 2019

      There are no 1099 employees only 1099 contractors–

  2. Chuck Yates
    Chuck Yates September 5, 2018

    On a recent job offer which requires a plethora of driving, I was told the $0.55 per mile was to include an increase in insurance coverage to the requirements when doing work of their client (s).

    The offer was somewhat of a joke, but this does not sound right to me. i had done work for a Telecom client as a consultant, but in acting as a consultant this was an expense of doing business which is a legitimate right off for the corporation, but I do not believe it is if you are an employee

  3. Joseph Larsen
    Joseph Larsen January 7, 2019

    I work for a independent mobile technical company that handles contracts in various hospitals across the state in CA. They recently decided to no longer pay our mileage expenses from our homes (which are considered our “office location” in our policy literature), and instead arbitrarily decided to claim the “nearest hospital location” as our “home” in order to reduce mileage expenditures incurred for those of us who commute to those facilities. My question: is this allowance considered fair practice in CA and can a mobile independent contract company impose these kinds of travel expense limitations legally?

    • Angela Vogel
      Angela Vogel September 11, 2019

      I had to have this fight when I worked for Samsung a few years ago and won because the law does not support their argument. If your home is your office, then that is where your day, and your expenses, begin. I would fight this if I were you.

    • v
      v May 8, 2020

      contact scott hardy. attorney only handles class action. you can email him on his site. he’s good.

  4. Christy Davis
    Christy Davis March 27, 2019

    I was told my my employer here in California they will only pay .35 cents they quoted – me this: 0.58 is the maximum rate the IRS would allow to be reimbursed tax free but the current approved rate for us is 0.35.

    Is this true?

    • Lindsay Sommers
      Lindsay Sommers April 2, 2019

      Employers are free to reimburse more or less than the IRS rate as long their state doesn’t have its own requirements and as long as any lack of reimbursement does not cause the employee’s wages to fall below minimum wage. California employers do not have to reimburse the IRS rate. They may instead reimburse actual expenses incurred.

  5. Alisia Amaya
    Alisia Amaya May 9, 2019

    My employer is saying that I can only expense mileage outside of a “regular commute,” so…the first 50 miles are not able to be expensed. Only those that I incur in between my travel to and from work. Is this true?

    • timesheets_blog
      timesheets_blog May 20, 2019

      The IRS doesn’t require employers to pay for any mileage that an employee travels from home to work or vice versa. Since this is California law, you will want to talk to your local labor board to ensure that this is applies to California as well.

      • Karin Doss
        Karin Doss March 23, 2020

        If California does not require employers to pay for mileage from home to work, but the work address is constantly changing, how is this handled? For example, construction crews work at one site for one week and drive from home straight to the job and next week they finish and start a new job in a different City. How is this handled? Would the employer just pay the difference in mileage from what it would take the employee to get to the office from their home and from their home to the workplace?
        Ex. Home to office = 10 miles. Home to worksite = 15 miles. Employers pays for 5 miles?

        • Lindsay Sommers
          Lindsay Sommers March 25, 2020

          Employers aren’t required to reimburse employees from their residence to their initial work station. According to the IRS, employees will not receive reimbursement between their homes and office (or temporary work stations)– which means employers aren’t required to reimburse employees even if the work station is only temporary.

    • ST
      ST February 3, 2020

      Yes, this is true. Employers do not have to reimburse your mileage to and from work. Only mileage once you’ve arrived at work. (Like if you have to drive a client around, or run errands for the office, etc). Commute miles do not count as this.

  6. MF
    MF June 4, 2019

    Do you have a list of states that require travel and expense reimbursements? I can’t seem to find a list anywhere.

    • timesheets_blog
      timesheets_blog June 5, 2019

      We wouldn’t be the right place to find a list like that. You’ll have to research this one on your own, unfortunately. Side note: I’m not sure there’s a law anywhere that specifies expenses paid by an employee must be reimbursed, as wouldn’t there first need to be a law that specifies an employer can require an employee to pay company bills? Without the horse, you might not need the cart.

  7. TC
    TC July 22, 2019

    For company fleet vehicle drivers who have a payroll fixed personal use deduction, & also record monthly personal usage mileage; is it appropriate for them to not allow gas card usage when on leave or vacation? If so, what if the recorded personal mileage is less than the personal use monthly charge?

  8. M Rambler
    M Rambler August 5, 2019

    My new employer is training me at a store that is 35 miles from the store that I was hired for (although there is a much closer location, only 16 miles away). I asked about mileage reimbursement during my interview and they said they’d look into it. They later verbally agreed that I would be reimbursed for my mileage until my home store opened.

    I have been working for them for a month now and after asking several times, they have finally told me that they will not be reimbursing me for any of my mileage. I am making minimum wage, so I believe this would qualify as work related expenses causing me to fall below minimum wage.

    Are they legally required to pay me for my mileage/travel time?

  9. N Rogers
    N Rogers October 28, 2019

    I quit my job and my employer didn’t include my mileage reimbursement in my final paycheck. I was told that I would get the reimbursement 24 days after I quit. The date is the regular payment date I would have been paid if I would have still been working with the company. I am in California and I thought the law requires employers to pay all final reimbursements and pay within 72 hours of quitting otherwise a waiting time penalty would apply. Is this not the case if it’s mileage reimbursement I’m waiting for?

    • Lindsay Sommers
      Lindsay Sommers November 10, 2019

      I believe the waiting period is 30 days for compensation. To be sure, I would check with a legal counsel or the CA state labor board for more guidance.

  10. Anthony
    Anthony December 5, 2019

    I am an employer. My employee drives my van and now wants me to pay for all the gas including his normal commute from home to the job. Am I obligated to pay for the commute as well?

    • Lindsay Sommers
      Lindsay Sommers December 6, 2019

      Employers are not required to pay for reimbursement from the employee’s residence to the official work station and vice versa. You are only required to reimburse the employee when they are traveling from job site to job site.

  11. Mary
    Mary December 17, 2019

    My employer asks that we first deduct 60 miles from any mileage reimbursements we submit; I was told by HR that they do not pay for the first 60 miles as that’s considered allowable commuter mileage to get to work’s location.
    I rarely have any mileage to submit as I’m mostly in the office however on occasion I’ll need to visit a job site that is generally more than 30 miles away. So this means if I drive to a job site that is 40 miles away (80 miles roundtrip), I’ll only be reimbursed for 20 miles worth? Is this accurate/legal?

    • Lindsay Sommers
      Lindsay Sommers December 24, 2019

      California employers are required by law to reimburse employees for any miles driven for work purposes; however, they do not have to reimburse employees when they’re traveling from their residence to their official work station. Employers either have to reimburse for all mileage using the IRS rate, or they must reimburse the employee based on mileage and receipt records. I’m unfortunately not familiar with “allowable commuter mileage”– you may want to consider speaking with your local labor board to ensure that your work’s policy is legal.

  12. liz alber
    liz alber January 20, 2020

    I work in California and my work is saying they will only reimburse .40 cents per mile. Is that true? I’m confused?

    • Lindsay Sommers
      Lindsay Sommers January 20, 2020

      If you are a resident of California employers do not have to reimburse the IRS rate. In fact, as long as you’re getting a full reimbursement, your employers are fine. They have the option to reimburse actual expenses incurred or they can use their own reimbursement rate. In some cases, they might reimburse you with their own reimbursement rate rather than your actual expenses incurred, but that method is a hassle for an employee and employer because an employer’s reimbursement rate might not cover the cost of Gasoline, The cost of maintenance (oil, lube, routine maintenance), insurance (liability, damage, comprehensive and collision coverage), licensing and registration, and the depreciation and all other costs associated with operation of the vehicle to your actual expenses incurred. If your employer’s reimbursement rate doesn’t equal the cost of your actual expenses incurred, that’s not acceptable. This is why a lot of employers choose to pay the federal mileage rate instead, because gathering the employee’s vehicle cost can be time-consuming.

      • Robert B
        Robert B January 23, 2020

        When determining the actual expenses incurred, it is not as clean cut as only deriving expenses from the price of gas. So the deal is not so sweet when you figure all the costs that need to be compared. As illustrated below by an analysis of the California case, Gattuso v. Harte-Hanks Shoppers, Inc.

        “In examining the different methods of reimbursement, the Supreme Court held that the actual expense method is the most accurate, but it is also the most burdensome for both the employer and the employee. Gattuso, at 478. Under the actual expense method, the parties calculate the automobile expenses that the employee actually and necessarily incurred and then the employer separately pays the employee that amount. The actual expenses of using an employee’s personal automobile for business purposes include: fuel, maintenance, repairs, insurance, registration, and depreciation.”

        Forty cents is not such a sweet deal when you consider thousands of miles added to your insurance policy while you watch your cars value constantly depreciate.

        For work I basically gave away 75 percent of my vehicles value in mile depreciations dedicated to work tasks. When my car inevitably fails to be reliable, my mileage reimbursement will not soften the financial blow of getting a down payment ready for purchasing a new vehicle because I will have no trade in value to bargain with. I try to make my 35 cents a mile stretch to cover all my vehicle costs. I had to learn now to change my oil on my own just to stretch my mileage reimbursement, that also doesn’t help the value of my vehicle.

        • Lindsay Sommers
          Lindsay Sommers January 29, 2020

          Yes, Robert, that’s very true. Thank you for sharing your feedback and knowledge.

  13. Scott
    Scott February 1, 2020

    Lindsay, I have a question piggy-backing on the CA reimbursement. My company reimburses $538 per month and $0.28 per mile. That’s it (no gas, no insurance). Because my vehicle will be more than 90% business miles (1,610 business/244 personal in January ‘20), can I write the gas receipts (at the business %) and the lost IRS mileage reimbursement off on my taxes? Thank you.

    • timesheets_blog
      timesheets_blog February 5, 2020

      That’s a great question for a local accountant.

  14. DD
    DD February 3, 2020

    Hi Lindsay,

    Thanks for providing such useful information. I’m a California resident working for a non profit. Sometimes additional driving to and from destinations during work is required. (not speaking of to and from work from home)

    It’s usually accepted in the office that this is “on the employee”, i.e. no one speaks of reimbursement. However, my wage is low enough already, and if there’s a law in place to aid employees in this position, I’d like to utilize it. In addition, I want to make sure my organization is aware of and engaging in appropriate practices.

    What’s the best way for me to figure this out in my work place? Reimbursement rate, procedure, etc.. How do I avoid the guilt I may receive when “asking a poor non profit about additional money” ?

    Thanks Lindsay!

    Appreciatively,

    D

    • timesheets_blog
      timesheets_blog February 5, 2020

      Great question. I’d check with your local labor board about the law. We’re not lawyers. But they can probably advise you on what a company is legally responsible for. It’s best to tread lightly when talking to your company about such matters. You don’t want to create any animosity.

  15. John Doe
    John Doe February 10, 2020

    I have a question: I work for a company as an employee and get paid per job or house that I do. When I was hired, they had me sign a contract saying that I would record my miles but that they would then deduct that from my pay as non taxable income. So if I made $500 that week and drove $200 in miles, they would only tax the $300 in income, and I would get my mileage tax free. Is this okay? Or should I be getting paid per unit plus my mileage? I’m in California.

    • Lindsay Sommers
      Lindsay Sommers February 14, 2020

      Technically under CA law employers are either supposed to pay the federal rate or they are supposed to pay you your actual expenses incurred. If they are not compensating you accordingly, or if they are underpaying you, they might be in trouble. I would recommend speaking with your local labor board about your current situation so they can let you know whether or not it’s legal.

  16. Lindsay
    Lindsay February 20, 2020

    Do companies based outside of CA also have this requirement to reimburse? I’m looking at an offer from a company in MA, all personal vehicle driving daily, with no mileage reimbursement or car allowance mentioned (for reference, my previous positions in the same field with large and small companies either had a car allowance and paid gas, or a mileage reimbursement at the federal rate).

    • Lindsay Sommers
      Lindsay Sommers February 20, 2020

      The FLSA doesn’t require employers to give employees mileage reimbursement, however, most states do have mileage reimbursement policies in place. According to the Massachusetts government website, employees who use their vehicle for work purposes may apply to their agency for reimbursements, but the rate is different than the IRS rate. You may want to speak with their local labor board to get more insight.

  17. Jon Turner
    Jon Turner March 29, 2020

    I am employed by a staffing agency in California and receive a W-2 from them. I am an employee of the agency but contracted out to a local business. My “base” is only 5 miles from my home. I had to travel 120 miles away from home recently on business and was told that I would be reimbursed for mileage after the first 50 miles EACH way. Is this legal? In addition to putting in a normal 8 hour work day, I also spent a total of 5 hours commuting back and forth and I was not compensated for the travel time. Is this legal? Also, now the business that I am working at has requested that I travel to deliver goods to other branches in the area using my car. Aren’t I entitled to mileage reimbursement for this too?
    Thank you.

  18. J Stew
    J Stew June 20, 2020

    Is it illegal or unethical if a company pays half of the IRS rate in California yet deducts the full IRS amount as a business expense (and profits from this).

    • Lindsay Sommers
      Lindsay Sommers June 24, 2020

      I would advise that you speak to an accountant who understand tax law in order to assist you

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